FOR IMMEDIATE RELEASE
Disconnect Between Desired and Actual Role of IT in CPG Companies, According to GMA-IBM-AMR Report
Contact:
Scott Openshaw, Director, Communications, 202-295-3957
Brian Kennedy, Director, Communications, 202-639-5994
September 8, 2008
WASHINGTON, D.C. – More than 75 percent of business executives and 80 percent of information technology (IT) executives believe that IT should be a key area for investment, but only one-quarter actually believe this investment is being made, according to a report released today by the Grocery Manufacturers Association (GMA). Conducted by IBM and AMR Research, the GMA Information Technology Investment and Effectiveness Study is based on survey responses from 118 executives from 46 consumer packaged goods (CPG) companies.
The report suggests that this disconnect between the desired and actual role of the IT function in company operations is the result in part of misaligned business strategy, wherein business executives view IT as a cost of running the business as opposed to a key player in revenue generating initiatives.
“The average IT budget for a CPG company is just over 2 percent of revenues and has not grown significantly in the past five years,” noted Jeanne Iglesias, GMA senior director, supply chain and technology. “Until companies realize that IT can make strategic contributions well beyond the day-to-day operations, this lack of funding is likely to remain a challenge.”
Overly-complex technological environments are another barrier to improving IT effectiveness, according to the report. Organizations with annual revenues of more than $1 billion reported utilizing more than 750 applications within their systems. This complexity hampers their ability to harness IT for more strategic ends.
“In an increasingly competitive environment, companies must leverage every asset to gain an advantage,” said Gerrit Schutté, senior vice president and chief information officer, ConAgra Foods Inc., and member of the GMA Information Systems Committee. “The IT function has the opportunity to be a difference-maker, but only if IT executives assert their team’s potential and focus on value-adding activities.”
Download the GMA Information Technology Investment and Effectiveness Study at www.gmabrands.com/publications/GBE03087-USEN-00.pdf.
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Based in Washington, D.C., the Grocery Manufacturers Association is the voice of more than 300 leading food, beverage and consumer product companies that sustain and enhance the quality of life for hundreds of millions of people in the United States and around the globe. Founded in 1908, GMA is an active, vocal advocate for its member companies and a trusted source of information about the industry and the products consumers rely on and enjoy every day. The association and its member companies are committed to meeting the needs of consumers through product innovation, responsible business practices and effective public policy solutions developed through a genuine partnership with policymakers and other stakeholders. In keeping with its founding principles, GMA helps its members produce safe products through a strong and ongoing commitment to scientific research, testing and evaluation and to providing consumers with the products, tools and information they need to achieve a healthy diet and an active lifestyle. The food, beverage and consumer packaged goods industry in the United States generates sales of $2.1 trillion annually, employs 14 million workers and contributes $1 trillion in added value to the economy every year.
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